AUDUSD remains steady near five-month highs at 0.6983

The Australian dollar has extended its rally, breaching the 0.6900 level to reach session highs at 0.6983, its highest price since early January. The Aussie has been favoured by the positive market sentiment to surge about 5% against the safe-haven USD in the last five days..

Aussie rallies on economic recovery hopes

The risk-sensitive AUD/USD has been boosted by investors’ confidence on a V-shaped recovery, with Australia likely to be one of the first major economies to recover from the COVID-19 shutdown. Earlier today, the Chinese Caixin Services PMI has improved to a 55.00 10-year high in May from April's 50.3 level, boosting hopes of a quick recovery in Asia which would pull Australian economy.

The USD remains vulnerable on a risk-on market, losing ground against its main peers. The better than expected US ADP employment figures and ISM PMI non-manufacturing activity have increased investors’ appetite for risk, with the massive protests against racism extending through the US increasing selling pressure on the greenback.  

AUD/USD: 0.6939 and 0.7032, key levels to watch now – Credit Suisse

The confirmation above the 200-day average at 0.6664/6789 has turned the pair’s near-term bias to the upside, according to the FX analysts’ team at Credit Suisse, shifting the focus towards 0.6939 and 0.7032, “We see resistance at the potential downtrend from 2013 currently at 0.6939, ahead of the 2020 high at 0.7032, where we would expect to see fresh selling at first. A break above here though would reinforce a broader change in trend to the upside.”